Long-term gains worthwhile, Paul Chan says as Hongkongers slam lack of budget sweeteners

Hong Kong Financial Secretary Paul Chan is facing significant public backlash following the announcement of the 2026-27 budget, which notably omits popular direct cash handouts or consumption vouchers. During a radio forum, residents expressed sharp disappointment, with one caller stating the consultation process felt 'meaningless' as their requests for financial relief were ignored. Chan defended the strategy, emphasizing the government's need to prioritize long-term fiscal stability and substantial infrastructure investment over short-term sweeteners. He revealed plans to brief credit-rating agencies and the International Monetary Fund next month on the budget's details, including a major HK$150 billion transfer from the city's Exchange Fund.

The core of Chan's budget is a proposed HK$150 billion (US$19.2 billion) transfer from the Exchange Fund's investment income to finance infrastructure projects, a move that has raised concerns about the fund's stability and the city's financial reserves. In response to criticism, Chan outlined alternative measures to support the public, including increased tax allowances, tax reductions, and organizing more events to boost tourism revenue. This shift marks a significant policy pivot from the post-pandemic era of direct stimulus, signaling the government's focus on rebuilding fiscal buffers and funding large-scale development. The controversy highlights the tension between immediate public demand for economic relief and the administration's strategic planning for Hong Kong's future competitiveness and financial health.